Sears Canada could face liquidation as soon as mid-Oct.

TORONTO — Sears Canada has just over a week to assess another revised bid from a buyer group led by its executive chairman as its lenders press for liquidation of the embattled retailer that could start as early as mid-October.

Orestes Pasparakis, a lawyer for the insolvent retailer’s court-appointed monitor FTI Consulting Canada, told the court it is assessing a revised bid from a group led by Brandon Stranzl that was submitted late Tuesday, but Sears Canada is running out of liquidity and time to decide which route to take.

“We are nearing the end of the road… We have pushed the timelines to preserve optionality, and quickly running out of money,” he told Justice Glenn Hainey on Wednesday.

Justice Hainey extended Sears Canada’s creditor protection, which was slated to end Wednesday, until Nov. 7.

However, a group of lenders who have provided debtor-in-possession financing to Sears Canada to help keep its stores open are pushing for a liquidation agreement to be approved by the court during a hearing on Oct. 13, or risk a default.

According to an amendment to an agreement with lenders submitted Tuesday, the retailer must sign a liquidation agreement by Oct. 7 — revised bid notwithstanding.

A process to then liquidate the remaining Sears locations could start as soon as Oct. 19.

“There is a massive swing in value,” if the process is not started by then, Joe Latham, a lawyer for Wells Fargo Capital Finance Corp. Canada, told the court.

If a proposal to buy the business as a going concern does not materialize, he added, it is key to liquidate before athe Christmas season is over to maximize the value the process can attain.

This comes after the court-appointed monitor said in a report earlier this week that Sears Canada is losing money on a weekly basis but will have enough liquidity to fund its operations until Nov. 7.

“We have a very short fuse on a potential liquidation of the company,” said Jeremy Dacks, a lawyer representing Sears from law firm Osler, Hoskin & Harcourt LLP. “We do have a going concern bid that has issues that still need to be resolved and a matter of days, not weeks, to proceed.”

On Wednesday, Justice Hainey gave the green light for the sale of 12 Sears stores and its wholly-owned subsidiary and appliance retail chain Corbeil. The judge also approved the sale of a Sears distribution centre to Indigo Books and Music, as well as the sale of three home services businesses.

A proposal to sell the Viking appliance brand to Canadian Tire, however, was adjourned on Wednesday, as another party has the first right of refusal.

Mark Zigler, a lawyer with Koskie Minsky representing thousands of pensioners, said a decision must be made between the two paths before Sears Canada as soon as possible. He said they are not opposed to a proposal to buy the company as a going concern, but the delays in the process leaves pensioners “bearing the brunt” of the cost.